Hi
Follow these steps to erase your locked Apple Watch and re-pair it with a replacement iPhone:
- Connect your watch to its charging cable, connected to power.
- Whilst keeping your Apple Watch on the charger:
- Press and hold the side button until you see the Power Off slider.
- Press firmly on Power Off (do not try to slide it - just press down more firmly than a normal tap) and then tap on Erase all content and settings.
- Pair your watch using the Watch app on your replacement iPhone, choosing to Restore from Backup if offered the option.
- More information:
Be sure to also follow the instructions here in respect of your lost iPhone:
If your iPhone, iPad, or iPod touch is lost or stolen - Apple Support